Entrepreneurs...Don't Make These Mistakes With The IRS

There are many non-core activities of a business that can easily trigger IRS problems. For example, the collection of sales tax can be tricky. And of course, payroll is rife with potential issues. In fact, if you misuse funds, you could be subject to criminal liabilities!

The good news is that there are many top-notch cloud services that will handle all the compliance requirements like Gusto (which is focused on payroll) and Avalara (which provides services for sales tax).

But you should also get an accounting system – like QuickBooks or
Xero – that will make it easier to prepare your tax returns as well as handle estimated payments, which often trip up entrepreneurs.

Finally, you might want to look at getting an app for mileage (MileIQ is a good option). While the deduction can be sizable, the IRS also realizes that there is lots of potential for abuse.

Mistake #2 – Always Going One-On-One With The IRS

When dealing with the IRS, there are certain things you should be able to do on your own. Examples include:

Resolving a low-dollar tax debt

Substantiating a disputed deduction (by writing a letter that includes a check or receipt)

Setting up an installment plan if the amount is under $25,000 (the IRS will likely accept it automatically)

Yet there are other areas where you should seek out help. These would be if you have been pegged for an audit, your tax debt is over $25,000 (this usually requires an extensive disclosure of your financial information) or the IRS has issued liens or levies.

Unfortunately, when it comes to tax resolution services, there are various fly-by-night operations that promise to solve all your tax problems (you’ve seen the commercials). But you need to be wary. Rather, the best approach is to find someone who has a trusted tax credential, such as a CPA, attorney’s license or the Enrolled Agent designation.